More Hay Likely In 2012, FAPRI Says

U.S. hay production will increase this year if growing conditions improve, according to a University of Missouri (MU) think tank.

U.S. all-hay production for 2012 is estimated at 140.2 million tons, according to the annual U.S. Baseline Briefing Book delivered to Congress last week by MU’s Food and Agricultural Policy Research Institute (FAPRI).

That’s up from just more than 131 million tons in 2011. Legislators will use the projections, which extend out for 10 years, to debate the economic impact of proposed ag policy changes in the next farm bill.

Coupled with a reduction in hay use due largely to declining cattle numbers, increased production this year would lead to a rebuilding of hay stocks. FAPRI projects that this spring’s ending stocks will total 14.6 million tons. Next year, ending stocks could be more than 17 million tons. After 2013, projected hay production and use will be in balance, FAPRI estimates, “but weather and other factors will cause market volatility.”

A production rebound would likely cause prices to fall back from current levels. Even so, prices are likely to remain above the levels of 2009 and 2010. Long term, FAPRI expects hay prices to flatten out in the $130-150/ton range between 2013 and 2021, which is the last year covered by the report. But it cautions that “hay markets are more fragmented than markets for most other agricultural commodities, so national average prices may not reflect local markets.”